RUSSELL – Russell Biomass LLC President Peter Bos confirmed Friday that the Russell Biomass project has been terminated.
A letter From William Hull on behalf of Russell Biomass was sent to Board of Selectmen Chairman Keith Cortis this week stating that there will be no project because of the latest regulations passed by the Department of Energy Resources (DOER).
“Following an analysis of the recent final DOER renewable energy biomass regulations, we must terminate and abandon the project. Under the final DOER regulations the project is not technically and economically viable because of the regulations’ required 50-percent efficiency, coupled with the new forest biomass fuel supply limitations. We are unable to modify the plant design as permitted,” stated the letter.
Bos said Friday that he is “disappointed” in the result.
“We are disappointed, but it wasn’t like we didn’t see it coming,” said Bos.
Bos remains an advisor to two out-of-state biomass projects and said he will pursue another project himself, just not in the commonwealth.
“These regulations don’t make it easy – if at all possible – for a biomass project in Massachusetts,” Bos said.
The main concern for Russell Biomass sponsors was a required waste heat supply from the plant that would necessitate a significant steam-turbine system redesign to use steam for a thermal application, thus making the air permit and certain other permits obtained no longer applicable.
“It would be difficult to find a year-round thermal energy requirement (space heating only applies for about half the year) from users who could financially guarantee the purchase of the thermal energy for at least 15 years – the minimum time frame required for the electric and thermal power purchase agreements needed in order to finance the plant,” Bos stated.
Another finding that led Bos to terminate was that the combined electric and thermal power economics of a biomass plant, even a highly efficient combined heat and power plant, would not be price competitive with on-shore wind – the cheapest renewable energy technology.
“It is not clear that a long-term electric and thermal power purchase agreement with viable pricing could be obtained. If it could, strong local and state political support would be essential,” the letter maintained.
Bos said a study conducted in 2010 found that biomass projects would not meet greenhouse gas (GHG) benefits requirements. However, he said, that study was flawed.
“The DOER scope used in that study was based on using cut tree, which is not what biomass does,” Bos said.
Russell Biomass was based on the use of waste trees. Bos said the plant would have actually increased greenhouse gas benefits because waste trees decay over time, emitting carbon dioxide and methane into the air. Burning the trees would still put carbon dioxide into the atmosphere, but Bos said it would eliminate methane emissions. The letter addressed this point:
“The primary focus of the Manomet Study commissioned by DOER and used as the science for the new regulations was, in fact, on GHG impacts/benefits. Unfortunately, the biomass fuel mix assumed in the Manomet study was significantly different from the typical fuel mix of a New England biomass plant, leading to a misleading GHG benefits conclusion now reflected in the final regulations. However, this is now history and the new regulations apply.”
Another reason listed for the decision to terminate the project was that the wood suppliers told Russell Biomass that that the cost of supplying forest biomass under the new forest waste wood physical and administrative limitations would require an increased fuel delivery cost.
“Lastly, potential lenders and equity investors revealed that they have become very risk-averse to financing almost any renewable energy project in Massachusetts because of the regulatory uncertainty vis-à-vis the political arena. Hence it is not clear that we could obtain financing. More broadly, it appears that the financing viability of other projects, including Cape Wind, could be affected by the regulatory climate that has developed. If so, this would be a regrettable – and unnecessary – loss for the state,” wrote Russell Biomass sponsors.
Bos said Russell is now left with property with little value.
“Perhaps the most important consideration for the Town of Russell going forward is how the site – now of little value – can be utilized to produce any meaningful tax value. A power project is inherently the type of project with the greatest taxable value,” he said.
In the letter, Russell Biomass thanked the residents and town officials who “were willing to work with us to shape and improve the project over time.”
